Corporate governance of commercial Banks

下面为大家整理一篇优秀的assignment代写范文- Corporate governance of commercial Banks，供大家参考学习，这篇论文讨论了商业银行的公司治理。商业银行作为一个金融中介机构具有与普通股份制公司不同的性质，这些特殊的性质决定了商业银行公司治理问题和治理机制也不同于普通的公司。对商业银行治理而言，其最具特点的治理机制是普遍存在的政府监管。政府对银行的管制要比其他行业严格的多，政府监督作为一种外部力量参与银行管理，同时还对银行其他的治理机制产生影响，在一定程度上是其他治理机制的一种替代物。

At present, there are two representative corporate governance theories. One is the principal-agent theory. Since Berle and Means in 1932 after the separation of ownership and control point of view, corporate governance issues has been defined as "agent" separation of ownership and control conditions, due to the 70-80 - s of the 20th century research focused on corporate governance is characterized by dispersed ownership structure of American companies, so the theory of corporate governance mainly from the early 80's is a delegate with principal-agent theory, the goal of corporate governance is to protect the interests of the shareholders, to ensure the shareholders to get return on investment. The second is the stakeholder theory. Since the 1990 s, corporate governance research gradually extended to the countries represented by Japan and Germany, in the company of these countries is concentrated ownership structure, corporate governance of the main problem is no longer a pure agency problem between owners and managers, the theory of corporate governance research is including shareholders, creditors, employees, customers, suppliers and the community, the relationship between stakeholders and regulations system arrangement of relationship between them, so the company in seeking to maximize shareholder interests at the same time should pay attention to and consider the interests of stakeholders.

Initially, the assumption is that the behavior of the owners and managers of bank and agent theory in the average company is the same, but the commercial bank as a financial intermediary has the properties of the different from common joint-stock company, the special nature of the decision problem and the corporate governance of commercial bank governance mechanism is different from ordinary companies. Macey and O 'Hara, mainly from Banks special operating according to the capital structure of high debt, they think that because of the bank's own capital account for just under 10% of proportion, make the owners of Banks have invested in risky activities of motivation, thus infringing only get fixed returns the interests of depositors, and the rights and interests of a lower debt ratio is easy to be found in the business process makes the lack of liquidity and thus fall into the predicament of the run. Arun and Turner discussed the particularity of bank governance from the bank's information opacity. They believe that the information asymmetry of Banks is much more serious than that of ordinary enterprises due to the fact that a lot of information of Banks is not easy to be disclosed, which makes the managers of Banks have sufficient motivation and are likely to engage in high-risk investment activities, thus damaging the interests of shareholders and creditors. In addition, Mr Caprio and Mr Levine argue that asymmetric information will make Banks far less competitive than the average firm, and that Banks in many countries and regions are natural monopolies. Government regulation, as a special governance mechanism of Banks, brings a special governance problem different from that of ordinary enterprises. Ciancanelli and Gonzalez that government intervention makes bank internal principal-agent relationship is more complicated than that in general enterprises, entrusted agency no longer merely the relationship between the owners and managers, also involves the regulatory authorities and management as well as the relationship between creditors and the agent is not a contractual relationship between them, more is the administrative relations. Caprio and Levine point to the problems that come with government regulation: Banks losing interest in large deposits that are uninsured and have an incentive to monitor them when they take in deposits; Regulatory restrictions on bank access and mergers reduce competition among commercial Banks. Finally, the government regulation itself also exists the principal-agent relationship, such a principal-agent may cause the regulatory goal deviation. Weian li and Cao Ting particularity of commercial Banks is the end of the domestic typical research summary in this field, the characteristics of the commercial bank itself led to its special governance mechanism, which in addition to overseeing the special governance mechanism, they also mechanism of commercial bank's board of directors and m&a are studied, analyzes its particularity. However, most studies think that except the special governance mechanism of government regulation, the corporate governance mechanism of commercial Banks is similar to that of general companies, and its particularity is not very obvious.

The corporate governance mechanism is both internal and external. In general, the internal mechanism of corporate governance is mainly the supervisory role of the board of directors and the incentive system for senior executives. In addition to market competition, the external mechanism is also very important for the supervision of creditors and Banks. For commercial bank governance, its most characteristic governance mechanism is universal government regulation.

The government regulates Banks more strictly than other industries. As an external force, government supervision participates in the management of Banks and exerts influence on other governance mechanisms of Banks. To some extent, it is an alternative to other governance mechanisms. Arun and Turner believed that because of the opacity of commercial bank information, commercial Banks face less market competition pressure and therefore need stronger corporate governance mechanism. They argue that government regulation is determined by the natural nature of commercial Banks, designed to protect depositors and the entire financial system. Levine argues that government regulation is mainly aimed at protecting investors, addressing serious information asymmetry and legal deficiencies that undermine the effectiveness of corporate governance in commercial Banks. Ciancanelli and Gonzalez summarized the main tools of government regulation: prudential regulation, the central bank's lender of last resort policy and deposit insurance system, policies that limit competition. They believe that the regulatory authorities take risk reduction and system stability as an important goal, and that they urge Banks to consider not only the interests of shareholders, but also the interests of other stakeholders and the public interest. At the same time, they believe that supervision is not only the supervision of the bank's managers and shareholders, but also the supervision of the market, which makes the market faced by commercial Banks a regulated market. However, these policies will lead to new problems in the management of Banks. Due to the lack of competition in the market faced by Banks due to regulatory restrictions on competition and bank mergers, merger and acquisition mechanism is difficult to play a role. The last loan and deposit insurance system of the central bank plays a role while making the creditor's supervision motivation disappear. Therefore, many researches believe that the deposit insurance system is unnecessary, and empirical studies support this view. Hong zheng USES theoretical model to study that the deposit insurance system must be supported by prudent bank supervision, while the lender of last resort role of the central bank is unnecessary. Caprio and Levine argue that the aim of banking regulation is to strengthen corporate governance and reduce risks, but the opacity of the banking industry makes this difficult, and regulators and supervisors will soon establish their own principal-agent relationships. Not only does government regulation itself create new problems for bank governance, but the choice of ways in which it functions can make a difference in efficiency. Levine summarized the ways in which government regulation works, arguing that the efficiency of regulation varies greatly from agent to agent. When government regulation is a kind of banker bureaucracy or official supervision regulation, it will lead to the inefficiency of government supervision, which will reduce the efficiency of bank corporate governance in pursuit of its own interests. Constrained official oversight aligns the interests of supervisors with those of society, makes supervisory agents independent of Banks, and establishes the right incentives for regulatory capture. At the same time, their study found that independent supervision agents reduced the adverse effect of power agents. They believed that the most effective way was to delegate the supervision to the private sector, and they found theoretical support that private supervision would be the best way to improve the corporate governance of Banks.

External oversight is largely dependent on markets and creditors, yet most studies have found widespread government regulation to limit competition in markets. Mergers and acquisitions will put pressure on enterprise managers to maximize the value of the enterprise. However, such a governance mechanism can hardly play a role in the banking industry. According to Ciancanelli and Gonzalez, the main means for the government to restrict competition is the access of Banks and the merger and acquisition of Banks. The pressure of merger and acquisition faced by bank managers is much less than that faced by ordinary companies, which makes them have sufficient motivation and possible to engage in high-risk investment activities and harm the interests of shareholders and creditors. Caprio and Levine USES standard theories of corporate governance from the perspective of global discussed the essential characteristics of corporate governance of commercial bank, found in the study of mechanism of bank mergers and acquisitions, due to information asymmetry makes Banks m&a costs too much, outside the bidder is hard to get enough information of mergers and acquisitions, there would be no threat of managers to form m&a, additional regulatory restrictions on bank mergers and acquisitions also make acquisitions mechanism is difficult to implement and play its role. Another important external supervisory force of an enterprise comes from its creditors. The bank's main creditor is small depositors, whose debt is so dispersed that it is difficult to monitor the bank. At the same time due to a serious asymmetry of information, making it easier for the interests of creditors by the shareholders and managers, the government in order to protect the interests of the creditors, launch the final loan and deposit insurance system, this system is to protect the interests of creditors and to control the system risk, but because no matter how the bank's creditors can get fixed income, the creditor of bank supervision and incentive disappear, the bank's external supervision strength gone.

As the government's restrictions on market and competition and the deposit insurance system and other measures make the external supervision mechanism of Banks very weak, it is more necessary to improve the internal governance mechanism. Like corporate governance in general, the internal governance mechanism of Banks is mainly the board of directors and incentive mechanism for senior executives. The board of directors is the central link of the corporate governance mechanism and enjoys the important power to hire, fire and pay the senior managers. The Basel committee has made a simple summary of the board's role in banking supervision. Macey and O 'Hara, think the existence of the deposit insurance system makes the bank was able to absorb new deposits to make up for the lack of bank funds, so the bank received when compared with the ordinary companies will be less illiquid threat, so the bank in the main role of the board of directors is not maintained its liquidity, but more major is to leverage and risk balance. The existing literature mainly focuses on the size and independence of the board of directors. Nam pointed out that the board of directors cannot be too large or too small. The role and actions of the board of directors; Access to information and general support from independent directors; Direct compensation and liability. In order to maintain the independence of the board of directors, there must be enough non-executive directors or independent directors. Macey and O 'hara argued that because of the high leverage of the bank and the mismatch between funds and liabilities, the board of directors should be accountable not only to shareholders but also to creditors with fixed income, and the board of directors of the bank should establish a wider range of governance. Although government regulation has a regulatory role for Banks and the deposit insurance system has reduced the requirements for the responsibilities of the board of directors, the board of directors is indispensable and should continue to perform their duties. The incentive mechanism for managers is considered as another major internal governance mechanism of commercial Banks. In many countries and regions, stock as a compensation incentive mechanism for CFO is widely adopted. In fact, some studies have found a positive correlation between equity compensation and corporate performance. Nam summarized the main ways of the incentive mechanism of commercial Banks, believing that equity incentive is an important way to mitigate the conflicts of interest between managers and shareholders, which can reduce the cost of supervision. However, commercial Banks have severe information opacity, and short-term performance of Banks can be simply operated at the expense of long-term healthy operation of Banks, which makes it difficult for the incentive mechanism to play an effective role.

The main characteristics that distinguish commercial Banks from ordinary enterprises are their serious information opacity, capital structure of highly indebted operation and their countless ties with government authorities. At present most of the literature has admitted that the particularity of commercial Banks and based on this study, but because of the rise time is very short, of the current research in this field still has not formed a perfect theory system, the corporate governance of commercial bank still exist many problems, this paper argues that bear the brunt of negative externalities caused or government regulation. Government regulation has become an integral part of corporate governance of commercial Banks for a variety of reasons. Since we cannot eliminate government regulation, we should try to solve the problems caused by its existence.

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